New REIT Farmland Partners Now Trading
April 14, 2014 10:14 pm
Farmland Partners, a new REIT, devoted to the ownership of farmland primarily in the corn belt of the United States, came to market last week at a price of $14/share. Demand for the shares was quite weak and on the first day of trading the share price closed at $12.98.
We had written about this IPO previously and there is not a single facet of the deal that is fair for the investor--there will be little FFO generated and the small scale of the IPO means they will not reach the scale required to make meaningful income. In our opinion these shares will act like Silver Bay Property Trust (a single family residential REIT)--a slow drift lower, with very little chance of positive FFO anytime soon.
The shares are trading under the symbol FPI. The offering documents can be read here. We strongly urge anyone considering these shares read the offering information closely.
We have added the shares to the REIT pages.
A Good Day For 'Rearranging" a Bit
April 14, 2014 2 pm
As we had noted we were looking to sell Digital Realty Trust (Ticker:DLR), a large, quality REIT from our portfolio and we have done so. We only had 200 shares of this issue and we had a reasonable 6% gain (plus 1 dividend) so it was ok to sell. The primary reason we sold is that DLR is a fairly volatile security, which we dislike and it is our thought that even though it is a quality REIT it seems to be 'out of favor' and seems to have an easier time falling then rising. Additionally we had expended almost our entire cash account and we wanted to add a bit of cash to the till.
With the sale of DLR we had some funds to purchased a small 200 share position in new issue Legacy Reserves 8% cumulative preferred which began trading today. With the sale of DLR and the purchase of Legacy Reserves preferred we raised the portfolio current yield by 3 basis points--not much, but over the course of a year one can gain significant amounts of increased yields.